Over the past few years, many states across the country have focused regulatory efforts on helping residents obtain life insurance benefits they may not have known about. As a consequence of these initiatives, many Americans have been able to recover a combined billions in unclaimed funds, and it is therefore likely that states will continue these pursuits for some time to come.
For instance, the state of Illinois recently launched a database designed to help people determine if they had life insurance benefits in their name but had not yet claimed, and this effort has led to millions in recovered funds in just a few months, according to the office of Illinois Governor Bruce Rauner. From July 1, 2016, when it was first set up, to Jan. 30, dozens of families have been able to obtain more than $1.7 million in unclaimed life insurance benefits in their names.
How does it work?
When people think they might have unclaimed benefits but aren't sure how to obtain them, they can simply provide pertinent details through Illinois' Life Policy Locator Service online, prompting the state to query the 485 life providers licensed in the Land of Lincoln as to any potential benefits available, the report said. When and if such a policy is located, the company has 30 days to process the claim for the beneficiaries.
A similar effort has also been a huge success in Nebraska, according to its State Treasurer's Office. Over the course of 2016, the state helped almost 17,000 residents recover nearly $16.35 million in unclaimed property of all types, setting a new record for Nebraskans. That works out to an average of $962 per recipient. The previous high total for a year was $14 million, set in 2008. To help residents deal with these issues, the state's Unclaimed Property Division include two full-time researchers who not only help people find benefits, but also people who may be owed unclaimed property in the first place.
The idea is catching on
Because these kinds of outreach efforts have proven so successful, more states are getting onboard with starting their own initiatives. For instance, Maryland recently launched its own life insurance policy locator tool through the National Association of Insurance Commissioners, according to the Maryland Insurance Administration. Like the new Illinois effort, Maryland's is designed to help people who don't know where to begin in hunting down benefits that may be in their name.
"There are many people who do not know where to begin when searching for a lost life insurance policy or annuity," said Maryland Insurance Commissioner Al Redmer, Jr. "The life insurance policy locator streamlines and simplifies the process for consumers and insurance companies."
To this end, it's also important for life insurance companies to make sure they educate policyholders about the proper way to let family members or other beneficiaries know about the existence of whatever policies may be in their names. This can help to avoid later headaches and ensure beneficiaries can get the funds they may need, as quickly and easily as possible.